Editorial: A handle on health coverage

A new report spells out some good news for cash-strapped cities and towns: there's a better way to deal with double-digit, budget-busting increases in local health insurance costs.

The Patriot Ledger

A new report spells out some good news for cash-strapped cities and towns: there's a better way to deal with double-digit, budget-busting increases in local health insurance costs.

The problem is well known: since 2001, across the state, annual employee health coverage costs have risen 63 percent, while municipal budgets have gone up just under 15 percent, and local aid has actually decreased 1 percent in the same period.

The report, "Municipal Health Reform: Seizing the Moment," by the Massachusetts Taxpayers Foundation and the Boston Municipal Research Bureau, cites potential savings for cities and towns that join health plans offered through the state Group Insurance Commission (GIC). The report can be found at masstaxpayers.org

Gov. Deval Patrick signed the health care local option into law earlier this summer as part of his Municipal Partnership Act, allowing communities to buy health insurance for municipal employees through the existing state plan. The idea is simple: a bigger participant pool allows the GIC to bargain for better deals and more competitive insurance rates.

That's borne out by experience: health care costs for municipal employees rose almost twice as fast as state employee health care costs from 2001 to 2006.

The report says municipal health care costs will consume between 30 and 36 percent of property tax revenues in fiscal 2018 if municipalities do not join the GIC, compared to 23 percent in 2018 if all municipalities join the GIC.

The idea of saving local tax dollars through the state insurance plan sounds appealing, but not everyone is on board. State AFL-CIO President Robert Haynes, using surprisingly vitriolic language, blasted the report and its authors upon its release. Haynes called it "a chance to bash unions and attack the fundamental right to collectively bargain."

There are incentives on all sides to lower municipal health insurance costs. Unionized city and town employees pay local taxes, too, and have an interest in stabilizing property taxes. And it make no sense for them to be paying higher contributions on overly expensive health plans.

As it is, local labor unions have a say in whether a city or town joins the state insurance plan The law requires agreement from 70 percent of a community's union workers for a city or town to buy into the GIC. Municipal managers can't scrap existing health insurance plans to join the state plan without a majority of employees giving their OK.

So why not let municipal employees and their union officials to sit down and crunch the numbers?